BitMEX Ethereum Whales Steer Market Trends with Smart Money Moves

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A keen-eyed quant has shed light on the manner in which the tendencies within the BitMEX exchange reserve have been steering the price of Ethereum for the past couple of years. The BitMEX Ethereum Whales, astoundingly, have displayed behavior indicative of smart money over this time.

Laying it out in a CryptoQuant Quicktake post, the analyst revealed a distinct pattern in the Ethereum exchange reserve of the BitMEX platform. In the crypto world, the term “exchange reserve” is an on-chain metric used to track the aggregate quantity of Ethereum lodged in the wallets of any particular centralized exchange.

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If the value of this particular metric escalates, it indicates that investors are shifting their investments into the platform. Given one of the prime motives for transferring money to exchanges is to sell, this development can bear implications of a potential bear market for the price of the asset.

At the same time, the opposite movement in the indicator implies a net quantity of the cryptocurrency’s supply moving away from the exchange-related wallets. Investors often place their coins into self-custody for long-term holdings, making this trend potentially bullish for the coin’s value.

An illustration of the trend of the Ethereum exchange reserve at BitMEX over the recent years presents an interesting narrative. The metric has been pacing sideways of late, but a sharp increase was noted in mid-2022, suggesting that investors had made an enormous amount of net deposits into the exchange at the time.

Since BitMEX is home to a considerable number of whales, or large investors, this intense inflow signals the activities of such mammoth investors. Intriguingly, Ethereum took a nosedive towards its bear market low immediately after this marked rise, leading to the speculation that these whales had foreseen a drop and decided to sell before the crash.

Come September 2023, another notable shift was observed. The whales withdrew a significant quantity of Ethereum, almost entirely erasing the earlier bear market increase. The period that followed this major outflow witnessed the price of the cryptocurrency rally sharply, propelling it above the $4,000 mark for the first time since December 2021, hinting that the whales had once again accurately discerned the market and timed their purchases impeccably.

Since this mass exodus in September, the indicator hasn’t witnessed any significant fluctuations, with its value meandering sideways. However, it would be prudent for market watchers to keep an eye out for any deviations, considering that historically, such anomalies have often led to a shift for Ethereum.

Analysis of Ethereum’s recent price performance indicates a recovery push from yesterday’s lows. Nonetheless, the rush appears to be subsiding with Ethereum trading around the $3,400 mark. Given the asset appears to be rebounding off its recent lows, it will certainly be intriguing to see how the market evolves from here.